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FAQ- LOANS

• Does MPECU send me an email (eAlert) notification of direct deposits, balances or reminder of when loan payments are due?
MPECU does not initiate reminders, but you can set up alerts & reminders for yourself from Online banking.

-Log into Online banking.-Click on the Accounts tab. From the drop-down menu, select "Account Alerts."-A new window will open. Choose "Click here to add new alerts or reminders."-Here you may set up a variety of reminders and alerts for such things as loan payments, low balances, large transactions, or deposits.-Alerts can be sent as a text message, email, or a secure message within online banking.

• Why should I get my auto loan through MPECU?
MPECU makes it very convenient for our members to obtain loans. You may apply online, call one of our loan officers, come into the main office or branch to apply; you may also go directly to the dealerships and finance through MPECU with our CUDL program. Your payments can be setup on payroll deduction or taken directly from your MPECU account. MPECU is also a part of the shared service centers located across the country, making it very convenient for our members to obtain the funds for their loans.

• What is the highest obtainable credit score?
It has been said 900 is the highest score which can be obtained. No one will ever achieve the 900 credit score. The credit bureaus will take things into account to bring the score down to a more realistic number. Things deducted from the score are time the trade lines are open, type of accounts and balance compared to limit.

• What does the term FHA stand for?
The term FHA stands for Federal Housing Authority. This is a government run department which oversees many things associated with the housing market.

• What is FACTA?
FACTA stands for the Fair and Accurate CreditTransactions Act of 1970 and amended in 2003 (aka Consumer Credit Reform Act of 1996).FACTA was intended primarily to help consumers fight the growing crime of identity theft. Accuracy, privacy, limits on information sharing, and new consumer rights to disclosure are included in FACTA.

• How can I opt out of unsolicited credit cards and insurance offers?
You may request that consumer credit reporting companies exclude your name from lists for pre-approved, unsolicited credit and insurance offers.To opt out for 5 years: call toll-free 1-888-5OPT-OUT (1-888-567-8688) or visit www.optoutprescreen.com. The phone number and website are operated by the major consumer reporting agancies.To opt out permanently: You may begin the permanent Opt-out process online at www.optoutprescreen.com. To complete your request, you must return the signed permanent Opt-out Election Form, which will be provided after you initiate your online request.

• Does MPECU sell warranties for vehicles?
Yes, MPECU offers warranties to our members. You do not need to have the loan with us or have a balance on a loan elsewhere to obtain a warranty. The warranties vary in prices, years and mileage of coverage.

• Can I get a free credit report?
Yes, everyone is entitled to one free credit report every year from each of the three credit bureaus. You can access your free credit report by going to www.annualcreditreport.com, or by calling 1-877-322-8228, or writing: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA. 30348-5281.Just a reminder for people to be careful when looking for a "free" copy; this is the only website that you can get the report for free. Other sites claim to be "free" but they are actually giving you a free trial membership which, if it is not cancelled within the time given, (and these sites hope you forget) will charge you monthly membership fees.

• Does MPECU offer credit life and disability insurance on secured and unsecured loans?
MPECU offers both single credit life and disability insurance and joint credit life and disability insurance on secured and unsecured loans and our VISA credit card.

• What information should I be looking for on my credit report and how do I correct any errors?
Your credit report is an important piece of your credit history and should be reviewed in detail. It's especially important to check your credit report (which details how well you pay your loans, bills and credit card purchases) before applying for a loan or other credit, to know where you stand. Check the accuracy of the following information on your credit report:
Name. Ensure the spelling of your name is accurate.Address. Ensure your current and previous addresses are accurately reflected.Social Security Number. Review for accuracy.Open trade lines. Take care to ensure any account which is open and has a balance is one which has been opened with your authorization.Credit Inquiries. Because these inquiries indicate to other lenders that you have applied for new credit (which could result in additional debt), lenders may view multiple recent inquiries on your credit reportas a sign that you may be overextending yourself. Be sure to review this section to ensure all inquiries are valid.

• How do I correct or dispute an error on one or more of my credit reports?
You should contact the appropriate consumer reporting agency (also known as credit bureau) and the lender directly. (Please see related links). If you report an error to any of the consumer reporting agencies, they are required to investigate and respond to you within 30 days. If you are in the process of applying for a loan, immediately notify your lender of any incorrect information in your report. Your lender will need to reorder your credit report(s) and score once any changes have been made to your information at the consumer reporting agencies.

• If I am in the process of paying my loan in full, who should I notify to stop my automatic payment?
It depends, if the payment was set up by MPECU you can contact us or if was set up by a bill pay service you would contact that provider.

• What types of vehicles does MPECU offer loans for?
MPECU offers New, Used & Classic vehicle loans as long as we can obtain a NADA book value in many of the classic car cases an appraised value.

• Does MPECU recommend credit counseling services?
Yes, MPECU recommends Consumer Credit Counseling services. MPECU works with LSS (Lutheran Social Services) and has and will continue to recommend our members in credit counseling to their services. LSS has many locations throughout our service area. They can be reached at 800-528-2926 to find one near you.

• Does MPECU verify income for consumer loans and credit cards?
Yes, MPECU now requires two recent paystubs or the last two year's tax returns (both personal and business) for business-for-self (self employed) members. Other sources of income verification would be Award Letters, completed Employment of Verification forms, Employment Offer Letter, or two recent bank statements showing a direct deposit of a benefit.

• What is the difference between a personal loan and line of credit?
A personal loan is an amount of money that you borrow for a specified length of time. You make fixed monthly payments, which reduce the amount of the loan until it is paid in full.

A line of credit is an open-ended revolving credit line with a specified credit limit. Your payment is based on the payment term and the amount of the line you have used. The account is always available to you up to your assigned preset credit limit.

• What does “Floating a Loan” mean?
When you make application for a mortgage loan you must decide on the rate. You have two choices at application time. You can either lock your rate at time of application or wait for a later time to decide on the rate you are willing to take. When you decide to wait it is called floating. You may be unwilling to take the rate which was offered to you at application time because you feel rates will improve in the near future. If you do float, you must be in contact with your loan officer. Once the rates get to where you wish them to be, the loan is then locked for a specific number of days.

• What is an APR?
The Annual Percentage Rate (APR) is the annual cost of credit on your loan after all the fees have been included. When comparing loans at different financial institutions, be sure and take into account the repayment period and down payment before comparing the APR.

• How are finance charges computed for loans?
The Finance Charge formula is:

Take the APR (Annual PercentageRate) and Divide by 365 to get the DPR (Daily Percentage Rate)Take the numbers of days between the loan payments or the last dividend postings, and times that by the balance. Take that number and times by the DPR or FACTOR.APR 4.50%Last payment 30 daysBalance $7000.004.50% / 365 = .00012329 (Roundafter 8 digits, 5 or up round up, less than round down)30 days X $7000.00 X .00012329 = $25.89 interest that has accrued on the loan since the last payment was made.

• What should I look for in an auto loan?
There are many different factors to look at when purchasing a vehicle. If you are buying a new vehicle you need to look into the rebates versus 0% financing. Often the rebates are better in the long run. If you are buying a used vehicle be it from a dealer or private party you want to make sure the value of the vehicle is comparable to the price of the vehicle. You may want to review the term you wish to take out, gas mileage, and overall cost of repairs and insurance.

• What is the longest term on your loans?
Terms on your loans are based on your credit history and credit score.

Personal unsecured loan terms can go up to 36 months.

Secured loan terms may go up to 15 years depending on what your are using for collateral.

Home loan terms may go up to 30 years depending on if it is an "in house" mortgage or not.

• What is invest in America?
Through Invest in America, credit union members can get amazing discounts on GM and Chrysler vehicles and other services from selected providers and merchants. Just visit LoveMyCreditUnion.org to get the details and follow the link to learn how to get your discounts. A membership fee through Invest in America is required for some discounts.

• What is the CUDL program?
CUDL stands for the Credit Union Direct Lending program. The CUDL program helps MPECU's members buy their vehicles, new or used, at the dealership while doing all the credit union paperwork there. It makes the process of buying a car or truck easy and convenient without having to come into the credit union.

• Does MPECU offer GAP (Guaranteed Assets Protection) on car loans?
Yes, MPECU offers our members the ability to purchase GAP on their vehicle loans through MPECU. The cost of GAP is $369 for the term of the loan up to 84 months and 125% of Retail Value of NADA. The premium of GAP can be included into your loan or purchased separately.

• What is your turn around time or posting payments?
All payments are posted to your account within the same day they are received in person or in the mail. The main branch is on today's business up to 5 pm and the Hermantown branch is on today's business until closing time.

• What is the Equal Credit Opportunity Act?
The Equal Credit Opportunity Act, prohibits discrimination in granting credit. Creditors may not consider the following factors when deciding whether to grant credit: sex, marital status, race, color, religion, national origin, age, or income from public assistance. Creditors may not discriminate against you because you have used your legal rights, such as contacting a creditor about a billing error.

• Do I need to call the credit reporting agencies if I lose my driver's license?
Yes, you must call the three credit reporting agencies and have a fraud alert placed on your credit report to prevent accounts being opened up under your name. The three numbers you need to call are:

• How do I stop my periodic payments before the next due date?
If you wish to discontinue your automatic payment, you may do so by calling MPECU. The request to cancel the periodic payment must be received no later than the day before the payment date.

• What is the difference between open ending lending and closed end lending? And what type of lending does MPECU offer for consumer loans?
Open end lending is a flexible way to apply for a consumer loan (unsecured) now or in the future with little fuss or bother. Once a member has a signed application on file, additional loan grants by the main member can be done over the phone, on-line or in person. The additional loan advance will be added onto the existing loan balance and deposited into one of our accounts or funded by a credit union check.

Closed end lending requires the member to apply each time and they can either come in to sign the papers or we can mail the papers for signatures before getting the money.

• What do I need to provide to dispute an item on my credit report?
When disputing an item on your credit report you will need the following information:

1)Sufficient information to identify the account or other relationship that is in the dispute, such as account number and the name, address, and telephone number of the member, if applicable.2)The specific information that the you are disputing and an explanation on the basis for the dispute.3)All supporting documentation or other information reasonably required by MPECU to substantiate the basis of the dispute. This documentation may include, for example: a copy of the relevant portion of the consumer report that contains the allegedly inaccurate information; a policy report; a fraud or identity theft affidavit; a court order; or account statements.

• I have run my own business for many years. My tax returns do not show a lot of net income. My annual depreciation deductions are quite high. Will I qualify for a loan?
Your loan officer should be able to add back your yearly depreciation to your net income for each year. Your last two years will be averaged to arrive at the income which will be used for loan qualification.

• My loan payments weren't paid out of my Direct Deposit like they usually are. Why is this and what do I need to do?
There could be a couple of different reasons why this may have occurred. The most common reason is that your payroll department sent the Direct Deposit from a different company ID number than they have in the past. Another possibility is that you have changed your account number and the loan distributions need to be reset under the new account number.

If you notice that your loans did not distribute correctly from your payroll deposit, please contact the credit union at (218) 336-1800 and we will be more than happy to assist you in correcting this problem.

• What is a credit score?
A consumer credit score is a three digit number, ranging from 375 - 900 based on five weighted categories:

1. Payment History - Which includes overdue accounts, late payment history, accounts sent to collection, bankruptcy, liens, or other legal judgments. It also includes positive information, such as accounts the consumer has managed to pay on time and debts that have been paidoff.2. Amounts Owed- Which includes the number of open accounts, the amount owed, the proportion of revolving credit accounts, and the proportion of the amount owed on installment loans, in comparison to the original loan amount.3. Length of Credit History - Which includes information about how long a consumer's accounts have been open, and when the most recent activity occurred on the account.4. New Credit - Which includes information about when & how frequently a consumer applies for, and obtains new credit. Which also notes whether consumers who have had credit problems in the past have re-established good credit practices.5. Types of Credit - Which includes specific information about the type of each consumer credit account, such as credit cards, installment loans, mortgage loans, cars loans, etc.

Everyone can improve their credit score. The most important step to improve your credit is developing a realistic long-range plan for paying off your debts. A consumer's plan may include the following:1. Pay your bills on time. This will keep your account from being delinquent.2. Reduce the amount of credit cards, and other credit that you maintain. Consumers with higher number of debts may wish to speak with a lender or credit counselor about consolidating their loans.3. Build credit slowly. Taking out too much credit at once, or none at all, will lower your score. Even applying for too many account within a short time will lower your score.4. Use credit to spend within your means. Consumers who make purchases they can't afford without credit may find that they can't afford the cost of credit either.5. Keep your credit balances under control. Some credit bureaus advise consumers to keep each credit account balance below 50% of the account's credit limit.

• Does MPECU have Share secured loans?
Yes, MPECU has share secured loans. They can be secured by your primary shares, by shares in a sub-account, or by shares in an advantage account.

• How does MPECU get a value for a collateral like a car, truck, boat, ATV, or motorcycle?
MPECU obtains a value for collateral from NADA (National Automotive Dealers Association). MPECU has on-line access to obtain up to date values. You may contact us to look up a value for you or you can obtain the value yourself by accessing their website. We are also able to access values for campers, RV's, travel trailers and some types of heavy equipment through the NADA site.